In re Grand Jury

• Citation: 475 F.3d 1299
• Decision Date: 09 February 2007
• Docket Number: No. 05-3126.,05-3126.
• Parties: In re: GRAND JURY.
• Court: United States Courts of Appeals. United States Court of Appeals (District of Columbia)

475 F.3d 1299

In re: GRAND JURY.

No. 05-3126.

United States Court of Appeals, District of Columbia Circuit.

Argued October 13, 2006.

Decided February 9, 2007.

Appeal from the United States District Court for the District of Columbia (No. 05mc00197).

Richard W. Beckler argued the cause for appellants. With him on the briefs was John F. Stanton.

Nicholas A. Marsh, Attorney, U.S. Department of Justice, argued the cause for appellee the United States. With him on the brief was Matthew C. Solomon, Attorney.

Stuart M. Gerson argued the cause and filed the brief for appellee.

Before: SENTELLE, Circuit Judge, and EDWARDS and WILLIAMS, Senior Circuit Judges.

Opinion for the Court filed by Circuit Judge SENTELLE.

SENTELLE, Circuit Judge.

The appellants, a corporate executive and his personal attorney, seek to have quashed a grand jury subpoena issued to the corporation's corporate counsel for testimony concerning communications made between the corporate counsel, and the client and his personal attorney. In the proceeding below the district court issued an order denying the motion to quash. Because we agree that the communications at issue are not protected by the attorney-client privilege, we affirm the district court's order. As this case involves an ongoing grand jury investigation the parties shall remain anonymous, and the factual details limited.

I. Background

A corporation held a Board of Directors meeting on February 7, 2003. At that meeting, appellant John Doe, the corporation's Senior Vice President for Business Development, recommended that the corporation participate in certain planned political activities. The Board expressly adopted a political action plan providing that corporate money would be contributed in specific amounts to named federal political candidates. Subsequently, in the summer of 2003, the corporation conducted an internal investigation of whether its past actions had violated federal campaign finance laws. This internal investigation was undertaken by the corporation's law firm (hereinafter the "law firm"), and in particular one of the law firm's partners (hereinafter "corporate counsel"). In September 2003 a report resulting from that internal investigation, alleging possible federal election law violations, was submitted by the corporation to the Department of Justice (hereinafter "DOJ" or "government").

After receiving the report the DOJ commenced an investigation into allegations of election fraud at the corporation and on the part of several of the corporation's employees. Pursuant to its investigation, the DOJ issued a subpoena to the corporation requesting documents related to, among other things, political contributions made by the corporation or any of its officers, directors, or employees. The corporation continued to be represented by the law firm. Appellant Doe in his capacity as an executive of the corporation was also represented by the law firm but in addition retained his own personal attorney. After the DOJ issued its subpoena, the corporation and its corporate counsel entered into a Joint Defense Agreement ("JDA") with Doe and his personal attorney (hereinafter collectively "appellants"). The JDA provided for the exchange of communications and documents between the parties to the JDA and that such communications and documents would remain protected by the attorney-client privilege. Corporate counsel also served as the corporation's custodian of record and the principal point of contact with the government.

In response to the DOJ's subpoena, the corporation produced, inter alia, an unsigned copy of the minutes of the February 7, 2003, Board of Directors meeting. These minutes appeared to show that the political activities plan Doe put forth at the meeting included illegal corporate contributions to federal political candidates. The DOJ then requested additional information from the corporation regarding the Board of Directors meeting. In response to this request, corporate counsel sent a letter on December 1, 2004, to Doe's personal attorney with a copy of the February 7th unsigned Board Minutes attached, asking that Doe provide "[a]ny recollections or information" that he may have in order to address the DOJ's concerns. In reply Doe's personal attorney sent corporate counsel a fax which stated that enclosed was "a signed copy of the [February 7, 2003] minutes with [Doe's] recommendations attached." These "recommendations" were typed on a one-page document which read at the top "Board Meeting," "February 7, 2003," and "Assignment Recommendation." This "Assignment Recommendation" seemingly indicated that, contrary to the Board minutes, there were no approved recommendations. Therefore it was exculpatory as to Doe. According to an affidavit filed by corporate counsel in the district court, after corporate counsel received the fax he on three occasions had conversations with Doe concerning the Assignment Recommendation. The first conversation occurred after corporate counsel contacted Doe and stated that the DOJ would want to know why the signed copy of the Board minutes and the Assignment Recommendation had not been previously identified and produced as responsive to the grand jury subpoena. Doe replied that only recently had he instructed his assistant to look at his personal copies of corporate minutes, which apparently had not been searched previously. Corporate counsel subsequently submitted the signed Board minutes and the Assignment Recommendation to the DOJ.

The DOJ then arranged to interview Doe. In the interim corporate counsel had his second conversation with Doe when he met with Doe and his personal attorney and informed Doe that during the interview the DOJ was likely to inquire as to why the Assignment Recommendation was produced so late. In reply Doe reiterated his prior explanation. Several days later, the DOJ informed corporate counsel that it believed that the Assignment Recommendation was not, as it had been represented to be, a contemporaneous record of the events that it described, and was therefore fraudulent. Corporate counsel then had his third conversation with Doe, at which time Doe stated that he could not remember the exact date of the document's preparation. Soon thereafter, Doe's personal attorney informed corporate counsel by telephone that the Assignment Recommendation was not made contemporaneously with the February 7, 2003 Board meeting but in fact had been prepared sometime in December 2004, i.e., the same time period when Doe stated that his assistant had conducted a search of his personal files.

Corporate counsel subsequently notified the DOJ that the Assignment Recommendation should not be considered a contemporaneous record of the February 7, 2003 Board meeting. In response, the DOJ sought from corporate counsel the circumstances under which the document was obtained as well as all conversations corporate counsel had with the persons who had provided the document to him. Corporate counsel initially claimed attorney-client privilege but later relented after the government stated that under the circumstances it was its position that the crime-fraud exception to the privilege was applicable. The DOJ then interviewed Doe, in his personal attorney's presence, regarding the Assignment Recommendation, at which time Doe told the DOJ that the document had been created in December 2004 to replicate notes that he had made around the time of the Board meeting. Doe also acknowledged that he knew that the Assignment Recommendation would be provided to the grand jury in connection with its investigation. When confronted by the DOJ with his conflicting statements concerning the manner in which the document had been provided and represented to the government, Doe's personal attorney raised the attorney-client privilege, interjecting that any communications between Doe and corporate counsel were protected by the JDA and privileged. Soon thereafter the DOJ began an obstruction-of-justice investigation into the matter and served corporate counsel with a grand jury subpoena seeking information concerning his conversations with Doe on the Assignment Recommendation.

Corporate counsel filed a motion in district court seeking an order to quash the subpoena or in the alternative directing him to testify. Attached to the motion was corporate counsel's affidavit containing the substance of his conversations with Doe concerning the Assignment Recommendation. The motion sought a ruling on whether these conversations between corporate counsel and Doe were attorney-client privileged. Doe and his personal attorney intervened, filing a memorandum in support of the motion to quash in which they requested that the court, on grounds of attorney-client privilege, not only suppress the subpoena but also exclude from discovery the Assignment Recommendation. After review of the parties' briefs, including a government ex parte affidavit, the district court held a hearing on the motion. The attorneys presented arguments but no testimony was taken. At the conclusion of the hearing the district court ruled that the Assignment Recommendation was a corporate document responsive to the grand jury subpoena and was not protected from disclosure by the attorney-client privilege. The court ruled further that the conversations between the appellants and corporate counsel concerning creation of the Assignment Recommendation were not protected from disclosure as the crime-fraud exception to the attorney-client privilege applied. The court also noted that the Joint Defense Agreement was a "contractual issue" that was not relevant to whether the crime-fraud exception applied.

II. Analysis

Doe and his personal attorney now appeal the district court's decision. As they did in the proceeding below they seek to have quashed the subpoena issued to corporate counsel for his personal testimony and to have destroyed or returned to them any documents relating to "confidential...